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UPDATE 2-Interior sec'y says no plan 'right now' to ban new oil, gas leasing

(Adds U.S. critical minerals policy details)

WASHINGTON, June 23 (Reuters) - U.S. Interior Secretary Deb Haaland on Wednesday told a congressional hearing that there is no plan to permanently ban new oil and gas drilling on federal land but her agency will soon release a report that will assess the future of the federal oil and gas leasing program.

The Biden administration paused the government’s oil and gas leasing auctions on federal acres in January pending a review that is expected to be completed in the coming weeks. The move was part of a sweeping plan to rein in fossil-fuel extraction and combat the effects of climate change.

Republican and some Democratic lawmakers in oil-reliant states have raised concerns that the pause would lead to a permanent ban, depriving those states of revenue.

“I don’t think there is a plan right now for a permanent ban but ... the review will come out early summer and we will assess the fossil fuel programs at that time,” Haaland told a House natural resources subcommittee.

She said oil and gas production “will continue well into the future” but said the administration wants “to make sure American taxpayers are getting a good return on their investment.”

Last week, a federal judge in Louisiana granted a preliminary injunction to Louisiana and 12 other states that sued Democratic President Joe Biden and the Interior Department over the freeze on new drilling auctions. Louisiana is a major hub for offshore oil and gas production.

Republican Congressman Garret Graves of Louisiana asked Haaland at the hearing whether the Interior Department has taken any steps to resume new leasing activity in light of that court decision, including publishing a new lease sale in the Federal Register.

Haaland said the Interior Department has not published details of a new lease sale in the Federal Register and said her agency and the Justice Department were reviewing the decision.

Separately, Republican Congressman Pete Stauber of Minnesota asked Haaland why the Biden administration plans to rely on ally countries for the bulk of the metals needed to build electric vehicles. Reuters first reported the strategy last month.

Stauber’s district includes Antofagasta Plc’s proposed Twin Metals copper mine, which is under regulatory review by the Interior and Agriculture departments. The Interior Department has also taken steps that impede U.S. critical minerals projects from Rio Tinto Ltd, ioneer Ltd and others.

Haaland did not answer Stauber’s question directly, but said that Biden supports U.S. energy independence.

“We agree that ensuring the availability of critical minerals and the future of our energy needs is very important to Americans,” she said. (Reporting by Valerie Volcovici; additional reporting by Ernest Scheyder; editing by Jonathan Oatis)

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